Cloud

Sam · Posted: Thu May 27, 2004 11:37 pm Post subject: Cloud

Cloud refers to a distinguished claim which on being effective will influence or damage the property title of the owner.

For example, Richard has a farm house in Florida. His nephew, John has a valid claim on the property. Hence, John's claim is a cloud over Richard's possession on that property.

The reasons behind a cloud on the title are:

The existence of an old mortgage or deed of trust with no record of the old debt being paid off.
A failure in the transfer of all the interest in the property to a former owner.
An improper deed.
An unresolved legal debt.

The value of the property reduces with a cloud on its title as it raises doubts upon the owner's ability to convey marketable title. Title companies will not allow insuring property title that is to be transferred with a cloud on it. The owner has to get rid off the cloud in order to transfer ownership rights free from any legal uncertainty. This can be done by using the Quiet Title method.

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